Disability Policies and the Term “Occupation”

Let me give you an example, pull out your disability policy and take a close look at it. Does it define “occupation”? Does the “occupation” refer to only the job you held at the time your disabled? Does it mean the “inability to engage in your occupation” at the time of your disabling condition? Or should it be interpreted to include any work requiring similar skills or producing a similar end point?

This very issue was raised in the case of Berkshire Life Insurance Co vs. Bruce Adelberg, in a private disability policy which was heard by the Supreme Court of Florida.

Mr. Adelberg, was not a physician. He worked as a jeweler, food commodity salesman, yacht salesman and crate space salesman when he became disabled in February 1990 after injuring his knee. Berkshire paid disability benefits to Mr. Adelberg who was employed as a yacht salesman at the time he became disabled.

To his credit, Mr. Adelberg attempted to go back to work but unfortunately after climbing on yachts for several days, his knee became swollen and he couldn’t walk.

He notified Berkshire that he was seeking total disability benefits, when he was was able to find employment as a freight space salesman.

Mr. Adelberg continued to claim disability benefits from Berkshire because of his inability to perform the duties of a yacht salesmen. Of course, Berkshire denied the claim on the basis that he wasn’t totally disabled from his occupation as a salesman because he was now working as a freight space salesman.

The Berkshire policy didn’t define the term occupation. At trial, the trial judge ruled the Mr. Adelberg’s occupation for the purposes of the lawsuit was a yacht salesman. Berkshire appealed the decision and ultimately the Florida Supreme Court weighed in because this was a private disability policy.

The Florida Supreme Court held that Berkshire’s contention that the term “your occupation” should be read to be any sales position rather than that of a yacht salesman wasn’t in the distinction that Berkshire made in the policy. If Berkshire wanted to use a broader definition of occupation to be “salesman” they should’ve stated to thoroughly in the policy. Since Berkshire wrote the policy, they had a duty to write a clear definition of the term “your occupation.”

Reading your policy closely can the difference between a denial or the receipt of your Long Term Disability.